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Lakehouse goes for growth

He may not be running the largest firm in the world but Steve Rawlings is hoping that Lakehouse will break into the top tier of housing contractors. Steve Menary reports

'I THINK the ethos behind partnering is great but in practice it doesn't work, ' says Steve Rawlings.

'It can't make sense for a client to give all its work to one company.

'For companies with partnering deals it's great, but what about the rest? They just disappear.'

Mr Rawlings fully endorses the principles behind partnering but he does not like the idea of missing out, which is something he knows all about.

Born in the east end of London, his great-grandfather founded a contracting operation called Nova that repaired damage inflicted on the capital by German bombers during World War II.The business was passed down to his grandfather then taken over by his father and uncle.Mr Rawlings followed suit.

'I just didn't get on with my uncle and, after my father retired, I was out on my ear. I left in 1987 and two years later the firm went bust, ' he says.

With one family business gone, Mr Rawlings is determined that the changing environment of the construction industry will not end another family firm.And Lakehouse, which he started in 1998, is certainly a family firm.The £25 million-turnover contractor employs his sister and his brother-in-law, who have since taken stakes in the business, although Mr Rawlings retains a majority 60 per cent holding.

Lakehouse started out doing fast-track refits of public houses, which Mr Rawlings feels gave him a 'can-do' attitude that still helps him today.

An investigation into the licensing trade by the Monopolies Commission caused clients to hold back from letting work.

Lakehouse then moved into housing association work until the Government introduced the decent homes initiative and more and more work started getting let under frameworks or partnering deals.

Refreshingly open, Mr Rawlings admits that he was slow to pick up on the initial move to partnering.

'When decent homes came in a few years ago, I probably missed the boat a bit to be honest, ' he adds.

'Being a small company we were focusing on what we were doing at the time and our turnover of housing association work went down during those years.'

He cites an experience with the London Borough of Islington to illustrate how small firms are forced out by partnering.

'We did £3 million-worth of work for three years in a row for Islington.We won it competitively and there were no complaints - they were very happy with the standard of the work, ' he says.

'Then a framework contract came out and we didn't get on because I gave the wrong answer to a question about a tenant liaison officer.

'It wasn't that we didn't have one, I just gave the wrong answer.

'That was a big chunk of our work lost because I sat an exam and got it wrong.We could do the work to the right quality but we just weren't slick enough - we couldn't sell it.'

Mr Rawlings is not looking for sympathy as he has set about trying to make sure Lakehouse is slick enough and can sell what it does.

A consultant has been hired to train his 90-odd staff in partnering.

Lakehouse has signed up to the Construction Industry Training Board's blueprint scheme for smaller contractors and is going for Investor in People status.

'In the past couple of years, ' he adds, 'I've spent a lot of money training people up for the bigger stage.'

Mr Rawlings expects Lakehouse, which made a pre-tax profit of £920,000 in the year to September 2004, to turn over £34 million this year.

He hopes that the workload will hit £50 million by 2007, when he wants to open a second office in Bournemouth.

Around 60 per cent of the current turnover comes from local authorities and he expects problems caused by the initial wave of partnering in social housing work to provide opportunities.

He sees Lakehouse as joining a second tier of firms that will increasingly take more work off the big social housing maintenance contractors, such as Connaught and Mears. London-based companies such as Durkan, Mulalley and Apollo are breaking into the elite tier and he wants Lakehouse, though currently smaller than all three, to join them.

'Partnering is all about continuous improvement and, if some of these improvements are not being met, then more work will come out to tender again, ' he says.

'A lot of local authorities are measuring work and it isn't up to standard and that's where people like us will step in. I'd like to think we're part of that second tier of firms and that this is our opportunity.'

Competitively tendered work provides 80 per cent of Lakehouse's workload and Mr Rawlings believes that the tide is gradually turning back towards this sort of procurement.

But while he may have some reservations about partnering in practice, he believes in the concept. Lakeside recently turned a competitively-won job with Brent Council into a partnering deal.

The firm is also starting to do more partnering work itself and Lakehouse recently landed a five-year contract for work on London Underground with Tube Lines.

The deal came via Lakehouse's acquisition of concrete repair outfit Renovo last June.

This win was followed up with another similar length job for work on Customs & Excise offices with property firm Mapeley, which manages this part of the Government's estate.

'I couldn't believe my luck, ' says a still incredulous Mr Rawlings.'We were the smallest firm on the list.'

He hopes Lakehouse will be turning over £100 million by 2012 but refuses to speculate about what might come after that.

'I'm my own boss and I live by my own judgements. If I told my friends the firm wasn't my life they would laugh; it is my life but it's adjusted to suit me. I'm not Royal Institution of Chartered Surveyors trained, I'm just an East End boy that's done well. I'm not even sure I'd be up to running a £100 million-turnover firm. I won't know until I get there.'